What was the amount representing interest deducted from the total minimum lease payments for Hardees' franchise and other finance leases as of January 31, 2024?
Hardees Franchise · 2025 FDDAnswer from 2025 FDD Document
0 | | 52,474 | | 7,853 | | | | | 2029 | | 97 | | 41,874 | | 7,129 | | | | | Thereafter | | 202 | | 119,002 | | 45,439 | | | | | Total future minimum lease and sublease rent revenue | | 1,193 | $ | 421,166 | $ | 84,409 | | | | | Unearned interest income | | (229) | | | | | | | | | Present value of leases receivable | | 964 | | | | | | | | | Less current portion | | (180) | | | | | | | | | Leases receivable, less current portion | $ | 784 | | | | | | | |
Company as Lessee
The components of lease cost for January 31, 2024 and 2023 are as follows:
| Fiscal 2024 | Fiscal 2023 | |-------------|--------------------------------------------------------------| | | | | $ 1,596 | $ 2,432 | | 1,572 | 1,302 | | 2 | 155 | | 3,170 | 3,889 | | 85,267 | 84,890 | | 1,229 | 1,135 | | 86,496 | 86,025 | | $ 89,666 | $ 89,914 $ 1,596 1,572 2 3,170 85,267 1,229 86,496 | Minimum lease payments for all leases and the present value of minimum lease payments for operating and finance leases as of January 31, 2024 are as follows:
| Finance Leases | Operating Leases |
|---|
Source: Item 21 — Financial Statements (FDD pages 84–85)
What This Means (2025 FDD)
According to Hardees's 2025 Franchise Disclosure Document, as of January 31, 2024, the amount representing interest deducted from the total minimum lease payments for franchise and other finance leases was $3,249. This figure reflects the interest portion included within the total lease payments for Hardees' franchised locations and other finance lease arrangements. The deduction of this amount is essential to determine the present value of the minimum lease payments, which provides a more accurate representation of the actual lease liability.
For a prospective Hardees franchisee, understanding this deduction is crucial for assessing the true cost of lease obligations. The total minimum lease payments include both the principal and interest components. By subtracting the interest, franchisees can see the actual amount they are obligated to pay towards the asset itself. This distinction is important for financial planning and assessing the profitability of the franchise.
This information is typically found in the financial statements section of the FDD, specifically within the notes related to lease commitments. Reviewing these figures allows potential franchisees to understand the financial obligations associated with leasing property and equipment, which is a common arrangement in the franchise industry. It is important to consult with a financial advisor to fully understand the implications of these lease obligations on the overall financial health of the franchise.